Nordstrom going private in $6.25B deal with founding family, Mexican retailer
CEO Erik Nordstrom said the deal 'marks an exciting new chapter for the business'
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The family that founded Nordstrom and El Puerto de Liverpool are buying Nordstrom, paving the way for the retailer to return to operating as a privately held company.
Nordstrom on Monday announced its agreement for the Nordstrom family and the Mexico-based company to buy out shares they don’t already own.
The planned all-cash transaction, worth $6.25 billion, comes about 10 months after Nordstrom set up a special committee for weighing proposals from the Nordstrom family. The Nordstrom family and El Puerto de Liverpool put forward a $23-per-share offer to take the company private in September.
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The Nordstrom family, including CEO Erik Nordstrom, CBO Pete Nordstrom and others, and El Puerto de Liverpool will pay $24.25 per share to acquire the retailer, Nordstrom said Monday.
Shoppers leave a Nordstrom store on May 26, 2021, in Chicago. (Scott Olson / Getty Images)
That price "represents a premium of approximately 42% to the Company’s unaffected closing common stock price on March 18, 2024, the last trading day prior to media speculation regarding a potential transaction," the retailer said.
"The special committee of the Nordstrom Board of Directors reviewed this proposal against the Company’s standalone prospects for growth. Following a rigorous and independent evaluation and consultation with outside financial and legal advisers, the special committee unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price," Nordstrom chairman Brad Tilden said.
Nordstrom, the Nordstrom family and El Puerto de Liverpool anticipate the completion of the transaction will occur in the first six months of next year. It will require "approval of holders of two-thirds of the Company’s common stock and the holders of a majority of the shares of the Company not owned by the Nordstrom Family or Liverpool or their respective affiliates and the Company’s directors and Section 16 officers" to go through, according to Nordstrom.
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The retailer will officially return to being privately held after that. It has been a publicly traded company for over five decades, since its initial public offering in 1971.
A Nordstrom department store in the upscale Broadway Plaza shopping center in downtown Walnut Creek, California, July 30, 2017. (Smith Collection/Gado / Getty Images)
The Nordstrom family will hold 50.1% of the retailer post-transaction, making them the majority owners, according to the company. El Puerto de Liverpool’s stake will be 49.9%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JWN | NORDSTROM INC. | 22.25 | -0.41 | -1.81% |
The company, co-founded by John W. Nordstrom and Carl Wallin, dates back to 1901. It originated in Seattle, the city where the pair opened their first store and where the company has its headquarters to this day.
Erik Nordstrom said the news "marks an exciting new chapter for the business."
Shoppers enter the Nordstrom store on April 1, 2003, on Michigan Avenue in Chicago. (Scott Olson / Getty Images)
As of the end of the third-quarter, the retailer operated 93 Nordstrom stores, six Nordstrom Local sites, 280 Nordstrom Rack stores and two Last Chance clearance stores, according to its third-quarter earnings report.
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Nordstrom generated $10.69 billion in revenue over the first three quarters of 2024. Its net earnings, meanwhile, were $128 million in the same timeframe.
In late November, the retailer forecasted "flat to 1.0 percent growth" in annual revenue for the year "versus the 53-week fiscal 2023."
Its market capitalization hovered around $3.99 billion as of Monday mid-morning.